Africa has not always been top of mind for a lot of OEMs. This could partly be due to the low levels of motorization on the continent. In 2019, before Covid-19, just under 100 million new vehicles were sold worldwide. However, just over 1 million brand new vehicles were sold in Africa. That’s about one-hundredth of that number! However, new vehicle sales don’t show the real picture for Africa, as about 90% of vehicles imported into various countries across the continent are used vehicles from other continents, but the majority of African countries still have very low levels of motorization compared to countries in the developed world. Only a handful of countries have motorization rates above 100 vehicles per 1,000 people. These low levels of motorization do present the perfect opportunity for consumers in Africa to jump straight into the wonderful world of electromobility, bypassing the ICE age.
Hyundai appears to be taking the lead in Africa. Marathon Motor Engineering, a joint venture between Hyundai Motor Company and Olympic champion Haile Gebrselassie, has started assembling the all-electric Hyundai Ioniq in Ethiopia. In Nigeria, the Stallion Group and Hyundai are also now assembling the critically acclaimed Hyundai Kona EV in Lagos. The Hyundai Kona EV is now also on sale in Ghana! In both Nigeria and Ghana, Hyundai is only offering the longer range 64 kWh version, with a real world range of over 400 kilometers, which is great in this part of the world where public charging infrastructure is not yet as developed as in other places.
Ghana needs EVs right now to help take up some of its excess electricity generation capacity. At the end of 2019, Ghana’s installed electricity generation capacity was about 5000 megawatts (MW). The peak load, however, was around 2,612 MW. The interesting part is the portion of the total dependable grid capacity, which was 4,580 MW in 2019 and was therefore in excess of the peak load by a whopping 1,968 MW! This was due to a rush from independent power producers during the times when Ghana was faced with a huge electricity deficit just a few years ago. A lot of these generators have “Take or Pay” clauses, meaning Ghana has to pay for electricity it doesn’t need at the moment. Ghana is paying over US$500 million annually for power generation capacity that’s not being used.
With tariffs of under $0.10/kWh in the residential space, Ghana, like many other places across Africa, is a great place to drive electric. Some individuals have started to import their own EVs from China. China could be a key source market for Ghana since they drive on the same side of the road. There won’t be a shortage of used EVs at very decent prices, plus there is an ever growing range of brand new models coming out of China. Accelerating the adoption of EVs in Ghana could really help take up some of that excess electricity. Ghana’s National Household Electricity Access Rate is around 82.5%, meaning EV uptake could be possible in most parts of the country. Which country do you think will get the Kona EV next? Kenya? South Africa? Let’s see. We will continue to monitor any developments very closely.